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Mexicans head to the polls on July 1 to vote in a presidential election that looks likely to return to power the centristInstitutional Revolutionary Party (PRI), which ran the government from 1929 to 2000. Polls show PRI candidate Enrique Peña Nieto in a wide lead over rivals Andres Manuel Lopez Obrador of the leftist Democratic Revolution Party (PRD) and Josefina Vazquez Mota of the center-right National Action Party (PAN), despite the emergence of the "YoSoy132" student movement that has rallied against the PRI's legacy of corruption. Peña Nieto's "rhetoric is that he is from a different generation, it's a different PRI," says CFR Mexico expert Shannon K. O'Neil, but, she says, "it's hard to tell." The new president will need to accelerate the economy's "stable but fairly slow growth" and will inherit a violent drug war that has led to increasing insecurity for Mexicans, O'Neil says. On combating the drug cartels, she says that "the focus will probably change, but the actual policies implemented will see a lot of continuity."

Is it a foregone conclusion that Enrique Peña Nieto is going to win, or is there still room for surprises?

It's becoming increasingly hard to imagine a scenario where he doesn't win. There is still, depending on the polls, roughly 15 percent of the population that says they're undecided, and for most polls that would be enough of a percentage to change the results, assuming that that whole 15 percent didn't go to Peña Nieto, but that's kind of a large assumption.

Security is a top issue in this election. What do we know about the candidates' approaches to the drug war and security issues?

All of the candidates say they will change the strategy. And what they have said in different ways is that they will shift from focusing on a war against drug trafficking to reducing violence. What that means on the ground is a lot of continuity and not too much change. What it means is emphasizing and expanding efforts to professionalize police forces, probably moving from the focus of the federal system to looking at the state and local police forces and strengthening those. It likely means working to continue reforming the justice system, to strengthen the courts, to training and improving the capacities of the attorney general's office. It basically means continuing a lot of what [current President Felipe] Calderon has started and moved toward in the last several years. So the focus will probably change, but the actual policies implemented will see a lot of continuity.

Is there much difference between the candidates in terms of the drug war?

There's not a lot of difference. Peña Nieto has talked about a military gendarme, sort of a military police, but when you look at the actual policy platforms of the three different candidates, there's not a lot of difference, particularly [between] the PAN and the PRI.

The candidates haven't talked a lot about [the drug war] in speeches or debates, partly because none of them have an answer or proposal radically different from what the country is doing right now. The other issue is: You look at polls in Mexico, and Mexicans generally support Calderon's strategy. A recent poll that came out by the Pew Global Attitudes Project shows that eight of ten Mexicans want the military to continue in their role on the drug war.

Most Mexicans say that the government is not winning the drug war, but the majority wants it to keep fighting the bad guys. So it's a bit of a disconnect.

Most Mexicans say that the government is not winning the drug war, but the majority wants it to keep fighting the bad guys. So it's a bit of a disconnect. When the candidate says, "I'm going to reduce the violence," they want that. They want the violence to end. But when they say "I'm going to do it by changing policy," the majority want the government to keep confronting the cartels.

The economy is another top issue. What are the economic priorities are for the next administration?

The two PAN presidencies in the last twelve years have had stable but fairly slow growth. [Mexico] was hit quite hard in the 2008 world recession because of its close ties to the United States economy. But it seems that in the last couple of years there was a real pick-up, and it's been doing quite well. It has a lot of positives: It has very strong macroeconomic fundamentals; it has a strong independent central bank; it has a quite low debt-to-GDP ratio; it's one of the highest-ranking countries in Latin America on the World Bank Doing Business surveys, so for an emerging market it's a good place to do business. All those things are good.

But there are things on the agenda that the next president will need to deal with. One is energy reform. Mexico's energy sector is closed; the constitution states that it has to be run by the state. Everyone agrees that Mexico needs more investment, more technical capacity, and to grow production.To get to the next level and keep production growing, they need a lot of foreign direct investment. Many people feel that if they open the energy sector, it will bring in foreign direct investment; it will make the country more competitive; it will lower energy costs for businesses broadly, which will be good for the private sector in general, and there will be a lot of good effects and economic growth.

Second, Mexico needs a fiscal reform, in part because it benefits from oil revenues, since the state owns the oil company, which represents about a third of the federal budget. Mexicans and Mexican companies pay quite low taxes, the lowest in the hemisphere. So there's a real need for a fiscal reform that makes the tax system more rigorous, more progressive.

The third is labor reform. Mexico has a huge informal sector--estimates vary widely, but probably 35-40 percent of the economy is in the informal sector. That's a non-tax sector, and that's another problem with the taxes. But how do you bring 35 to 40 percent of the economy into the formal sector, which also then brings with it for workers social security and other protections and benefits like health care?

What is attracting Mexican voters back to the PRI?

One, the PAN has been in power for twelve years, and if you ask Mexicans if they are better off now than they were six years ago or twelve years ago, there's a number that would say, "No, not really." There's been economic growth, but it's been slow--stable, but not spectacular. There has been definitely an increase in insecurity in Mexico, particularly under Calderon. And it's not just the drug-related violence, but increases in crimes, increases in kidnappings, increases in extortion. So you punish the incumbent party when things aren't going well.

The other big difference, and part of the reason why the PRI is doing so well, is the role played by political parties. In 2006, the PRI was deeply divided going into the election. They were unable to pull together and support their candidate, and they came in an embarrassing third. So they learned their lesson--if we want to win and gain power, we have to join and unite during the campaign. They have done that. Now you look at Peña Nieto and the PRI, and they have united from the far left to the far right and everything in between; from old party leaders that they call the dinosaurs to the new technocratic young people, they've all united behind him. Now, if he wins, and when it comes the time to govern, you have to choose people for political posts, you have to make decisions, you have to put forth policies, and you can't keep that united front, so there'll be some challenges in governing.

The PRI is trying to cast itself as a party that's evolved from the PRI that governed in the past. Are they really different now?

You have a mix of old and new [PRI] throughout the campaign. So the real question is, when [Peña Nieto] comes into office, who will he choose for key cabinet posts?

We won't know until July 2 and after that. There are members within the PRI who thirty years ago were doing the types of things people worry about: stuffing ballots, making things quite opaque, leaning on bending Mexico's democratic institutions. Those members are definitely there, and some of them are seen close to Peña Nieto. At the same time, you have a whole wing of new faces, people who are young and well-trained and seem to have a different view. You have a mix of old and new throughout the campaign. So the real question is, when [Pena Nieto] comes into office, who will he choose for key cabinet posts, as chief advisers, leading particular negotiations for reforms and such? That will give you a sense of whether he's old or new PRI, or somewhere in between.

I think in the end there will be a mix: He'll give some posts to the technocratic; he'll give some posts to the old guard dinosaurs, as they call them. But the main questions are: one, who does he put where? For instance, whom does he give energy to, because if he really wants reform energy, he has to put something different there. And two, what are his inclinations, where does he fall? He's surrounded [by] people from all different sides, but what are his real personal preferences? The rhetoric is that he's from a different generation, it's a different PRI, a democratic PRI, and that may be true or that may be the rhetoric; it's hard to tell.

The "YoSoy132" student movement against Peña Nieto has made headlines recently. How much weight does this movement have?

The movement itself and students in general, particularly in universities, are a small percent of the population, so in terms of actual votes cast, it's not going to be a big shift. Where this movement could have some influence is if it continues after July 2, [with] some of its demands--like making things more transparent, opening up the media sector to covering broader news, shining a light on backroom deals and old ways of doing things. If this movement and these students continue to push for these things, they could be a force in civil society and be a real buttress for the watchdog institutions Mexico needs.

What can we expect from a PRI administration in terms of cooperation with the United States on issues like security and trade?

I don't see the substance of the relation changing substantially. They see the benefits of U.S. cooperation and assistance and intelligence that the Calderon administration has cultivated and developed. The same with the economic side. But there may be some shifts. Much of foreign policy is driven by personalities, by relationships, and we are going to have a new president in Mexico. We may or may not have a new president in the United States, but either way we are probably going to have a new foreign policy team, at least in some elements, or people focusing on Mexico. There's going to be new people on both sides, so there's going to be a time to sort of re-form the trust and cooperation.

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